The fundamental question is if these new labour laws brought in by States as a result of the pandemicsecure the good of the workers or safeguard the interests of the employers?
When the bubonic plague struck the city of Ahmedabad in 1917, about 10 per cent of the population succumbed to it. As the plague was much more severe in the towns than in the villages, the workers employed in the textile industry wanted to return to the relative safety of their villages. To prevent an exodus, mill owners handed out "plague bonuses" to their staff which ranged from 20 per cent to 70 per cent. However, the prices of essential commodities, too, went up manifold due to the outbreak. After the contagion subsided, the employers stopped paying the plague bonus to their workers, who in turn protested as the prices were still high. They demanded a 50 per cent dearness allowance (DA) and there were strikes. To break the impasse, the Collector of Ahmedabad invited Mahatma Gandhi to intervene and facilitate arbitration proceedings between the workers and the employers. Gandhi's involvement included regular meetings with the workers under a babul tree on the banks of the Sabarmati. He published a leaflet daily to educate and create awareness among the workers. One such leaflet assured that "we want to secure the good of the workers while safeguarding the good of the employers." The non-violent protests ended when the workers were given a 35 per cent DA.
The three major takeaways from the plague outbreak in the context of the COVID-19 crisis are: The employers wooed the workers and dissuaded them from going to the villages by giving them plague bonuses. Second, efforts were made to end the dispute amicably and finally, the impasse was resolved in a consultative manner by involving the workers, employers and the Government.
The new laws triggered by COVID-19: Today, the outbreak and the post-lockdown economic gloom have prompted the States to announce mitigating measures in the form of Ordinances and executive directions in the labour and economic sectors. States, in an attempt to kick-start economic activity, have announced a slew of measures to relax the application of labour laws such as the Factories Act, 1948 and the Industrial Disputes Act, 1947.
The State Governments are conscious of the fact that the lockdown has resulted in a loss of income for businesses and a loss of livelihood for workers. On May 22, Karnataka, invoking the public emergency provision of the Factories Act, increased the working hours to 10 a day. Uttar Pradesh (UP) made the UP Temporary Exemptions from Certain Labour Laws Ordinance, 2020, which suspends the operation of all labour laws in the State. The only exceptions to this are that all workers must be paid the minimum wage; maximum hours of work shall be 11 and the spread-over should not exceed 12 hours in a day. Additionally, labour laws protecting children and women will stay.
Madhya Pradesh (MP) promulgated the MP Labour Laws (Amendment) Ordinance, 2020, which has a 1,000-day plan and Gujarat has a 1,200-day plan to revive businesses. MP, Gujarat and other States have relaxed the application of labour laws, including the Factories Act, 1948, the Contract Labour Regulation Act, 1970 and the Industrial Disputes Act, 1947. These new laws increase the working hours from 48 a week to 60 and 72, reduce compliance by factories and permit industries with less than 300 workers to declare termination or closure without prior approval. Some of the new laws suspend the erstwhile mandatory conciliation procedures before retrenchment. Gujarat has announced that there will be no overtime wages and only salary in proportion to the existing one shall be paid. Till now, UP, MP, Gujarat, Himachal Pradesh, Rajasthan, Karnataka, Punjab, Tripura, Uttarakhand, Haryana, Assam and Goa have temporarily amended their labour laws. Though these new laws are temporary, the fundamental question is if they secure the good of the workers or safeguard the good of the employers?
Indian labour laws: The Directive Principles of State Policy in Part IV of the Constitution say that the health and strength of workers should not be abused and citizens must not be forced by economic necessity to enter vocations unsuited to their age or strength. Further, the State within its limits of economic capacity or development, shall make effective provisions to secure the right to work, public assistance in cases of unemployment, disablement and in other cases of undeserved want. In all, Indian labour laws are beneficial pieces of social legislation.
India's global commitments: India has been a member of the International Labour Organisation (ILO) since 1919. ILO's International Labour Standards (ILS) stress on the health and safety of workers and human-centred recovery that is sustainable. The Employment and Decent Work for Peace and Resilience Recommendation, which was adopted by several nations including India, emphasises that crisis responses need to ensure respect for all human rights and the rule of law, including respect for fundamental principles and rights at work. ILS acknowledges the importance of engaging in processes and mechanisms to ensure efficient tripartite consultations and reaching a consensus on effective solutions. A climate of trust can be built through social dialogue and tripartism will be essential to address the COVID-19's impact.
In 2011, the UN Human Rights Council endorsed the Guiding Principles on Business and Human Rights (UNGP) in recognition of the State's existing obligations to respect, protect and fulfil human rights and fundamental freedoms; the requirement of business enterprises to respect human rights and the need for access to an effective remedy for those who are affected by adverse business-related human rights impacts or abuse. The UNGPs have become the authoritative global standard for business and human rights. According to the Prime Minister, "Responsible business conduct is a globally-recognised concept founded on the idea that businesses can perform better when engaged in re-vitalising the society from which they extract resources for production."
The National Guidelines on Responsible Business Conduct, 2018, were formulated by the Ministry of Corporate Affairs in its commitment to the Sustainable Development Goals. The UNGPs are a means of nudging businesses to contribute towards broader development goals while seeking to maximise their profits. These guidelines recognise that businesses are an integral part of society and that they will hold themselves accountable. These guidelines focus on equity, dignity and well-being, provision of decent work for all employees, engaged within a business or in its value chain, without any discrimination and in a way that promotes diversity. The principle recognises that the well-being of an employee also includes the welfare of her/his family. The guidelines signify the importance of protecting vulnerable and marginalised individuals, who were unable to realise their rights or enjoy opportunities on account of adverse physical, mental, social, economic, cultural, political, geographic or health circumstances, disability, caste, ethnicity, religion or political/religious belief. Businesses are encouraged to file Business Reports under these guidelines. Further, the SEBI as part of integrated reporting by listed entities, has mandated top 500 listed companies to file Business Responsibility Reports, which include a declaration on compliances under the labour laws.
Problems with the new laws: Though a health crisis has triggered the new laws, they have ignored health and safety issues. Moreover, ILS and UNGPs have been ignored contrary to the Centre's commitments. Taking the case of the Factories Act, 1948 alone, the States of UP, MP and Karnataka have relied on Section 5 to relax the provision of the Factories Act, contending that a public emergency has arisen. Under this law, a public emergency is a grave emergency whereby the security of India or any part of the territory is threatened by war, external aggression or internal disturbance. The UP and Karnataka labour law amendments have been challenged in the High Courts at Allahabad and Bengaluru. During the hearings, Karnataka and UP have conceded that no "public emergency" exists to relax the application of the Factories Act. On June 12, Karnataka informed the High Court that it had withdrawn its notification by which the provisions of the Factories Act, 1948, governing the working hours of staff, were suspended.
So far, the laws on working hours and wages had ensured the welfare of labourers. The amendments have distorted the balance and exposed workers to exploitation. State Governments will have to prioritise health and safety during this crisis. Further COVID-19 is a health crisis, and the States need to ensure that the health and the safety of the workers is a priority.
The State Governments should not be permitted to lower standards at the expense of human labour and consequently trade. Most of the new labour laws appear to be an attempt to encourage business entities without consulting the workers. Further, the new laws, or as some call them reforms, ignore issues of health and safety of the workers. These laws are contrary to India's ILO commitments. A balanced approach with the involvement of the workers, employers and the Government in labour reform is the only way forward.
Even if laws are tilted to favour businesses, at the cost of worker welfare, it will not help the economy in the long-term. It is now time for the Government and employers to engage with the workers and develop a climate of trust to rebuild the economy.
Originally Published by The Pioneer newspaper
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